Micro-Economic Environment + Demand Definition Flashcards
What is the Micro-Economic environment?
The factors that affect how prices are set between buyers and sellers for goods and services.
What is theory of Supply and Demand?
The interaction between buyers and sellers.
What is Demand?
The quantity of a good or service which consumers want and are WILLING AND ABLE to pay for.
What are Normal Goods?
When the demand for most goods and services goes up as income rises and down as income falls.
What are Inferior Goods?
When demand decreases as income rises.
What are Necessity Goods?
A type of normal good that consumers will buy regardless of their income.
What are Substitute Products?
Two, or more, goods or services that carry out the same purpose for the consumer.
What are Complements?
Goods that must be used together, such as a vehicle and fuel.
